The stem cell in the isthmus of gastric units continually replenishes the epithelium. Atrophy of acid-secreting parietal cells (PCs) frequently occurs during infection with Helicobacter pylori, predisposing patients to cancer. Atrophy causes increased proliferation of stem cells, yet little is known about how this process is regulated. Here we show that CD44 labels a population of small, undifferentiated cells in the gastric unit isthmus where stem cells are known to reside. Loss of CD44 in vivo results in decreased proliferation of the gastric epithelium. When we induce PC atrophy by Helicobacter infection or tamoxifen treatment, this CD44(+) population expands from the isthmus toward the base of the unit. CD44 blockade during PC atrophy abrogates the expansion. We find that CD44 binds STAT3, and inhibition of either CD44 or STAT3 signaling causes decreased proliferation. Atrophy-induced CD44 expansion depends on pERK, which labels isthmal cells in mice and humans. Our studies delineate an in vivo signaling pathway, ERK → CD44 → STAT3, that regulates normal and atrophy-induced gastric stem/progenitor-cell proliferation. We further show that we can intervene pharmacologically at each signaling step in vivo to modulate proliferation.